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Same power, different attitude.

Powershop has always stood up for electricity customers when other players in the industry have chosen not to. For the last two years we’ve been a champion of the forgotten power consumer, holding the big retailers to account. This month we’re launching a campaign that reflects those principles.

The first installation of the “Same Power, Different Attitude” campaign takes a bunch of rotten demagogues, famous the world over for their abuse of power, and recasts them as people who do decent things in their community. It’s satire for sure, but you could say we’ve got a bit of nerve to feature people in our ads who’ve regularly violated human rights. In truth, we think that dressing them up as humble, caring people is just about the best way possible to humiliate them.

Sometimes the most empowering thing you can do is actually to surrender your power to someone else. For too long, too many of the big companies have treated their customers like a minor adjunct to the business of making money. They might sponsor a few worthy causes here and there, but it’s no compensation for a lack of service and value.

People might find us a bit cheeky, maybe even a bit weird, but we believe fervently in treating our customers like, well, customers. We hope you agree.

@Mike: We understand and agree with the sentiments of your comment that these despots are evil, however our intentions are anything but to diminish their evil or portray them in a positive light. We are in fact attempting to highlight their evilness by making them look silly performing acts of kindness and provoking some thought around the idea that the world would be a better place if these rotten demagogues had used their power for good rather than evil.

We have also shared our campaign with Amnesty International and they like the idea because it helps draw attention to contemporary human rights issues; indeed they themselves have run similar campaigns in the past.

We are confident most people will understand the satire and the point we are trying to make – Same power, different attitude.

Not surprisingly we have received a wide range of comments on our campaign. Most people understand that there is no argument that the dictators portrayed in our campaign are inhumane and rotten to the core and that Powershop in no way endorses what they do or have done; but it is worth stating the obvious.

The issue for debate is whether it is OK and a sensible decision for a company like Powershop to use these images to sell electricity. Your view on this is obviously a matter of perspective and opinion. The feedback we have had ranges from “bold” and “brave” at one end of the spectrum to “disgusting” and “f**king stupid” at the other.

We have made a judgement call that it is OK on the basis and expectation that most people will understand the satire and the points we are trying to make; these dictators are evil and ridiculing them highlights this and makes a statement about what a better place the world would be if their power was used for good and not evil. The relevance of this of course is that this is an analogy of what Powershop is trying to achieve in electricity. Another important factor in our decision was the discussions we had with Amnesty International; they liked our campaign idea as it helps draw attention to contemporary human rights issues.

So, have we got it right? Are we bold or foolish? Is this campaign our folly? Can we improve our campaign to make the satire more palatable or are these images just too strong to make that possible? Is our judgement clouded by drinking our own coolade?

We absolutely encourage debate on these issues and welcome your feedback to help us make more informed judgements and decisions.

It is interesting to see you admit that the responses range from both extremes of the spectrum… but to answer your question “Have we got it right?” it would be interesting to see how MANY responses came from each end.

If you are getting a few “bold” and a lot of “foolish” – that pretty much puts the torpedo up the propeller-end of the campaign, surely?

If the reverse is true – more “bold” and only a few “stupid”, then this promotion has self-vindicated, has it not?

So Ari… in the interests of “fair use of the power” – how about letting us know which end the graph skews to, eh?

@Karl: I haven’t kept tabs of exact numbers but it feels pretty much neck and neck to be honest, and those against the campaign are more likely to be vocal about it. And I am not convinced the answer is black & white either. I think there are opportunities for us to improve the campaign without having to torpedo it; it is this area that feedback will be most valuable to us, or at least an understanding of why people think it is brave or foolish.

Good attempt and at a positive spin on a bad attempt to be funny, funky or otherwise. Offensive in short, foolish at best and just unintelligent. Sorry but why not use Hitler in your adds, or haven’t you got the real cajones required? You sure have not gained a new client here anyway. And if you haven’t kept tabs then saying its neck and neck is a very unscientific manner of measurement, kinda like using a teaspoon as a system of measurement.
Both the guys you use murdered many people and its a fuckt up way of explaining why you think its funny. Cheap publicity from cheap people. The irony is that even having a feedback facility is another lame way of promoting your lame campaign.

There are 2 main reasons we have not used Hitler in our campaign: (1) we have chosen dictators that draw attention to the evil of contemporary dictators, and (2) he his the first person people suggest we use – people will view him for what he is regardless of any satirical situation he is placed in.
We have never intended to track numbers for or against, that is not our objective. Our objective (and this reason for this facility) is not to seek more publicity, but genuine feedback and to engage in discussion and debate. And on that note, thank you for your feedback.

“These dictators are evil and ridiculing them highlights this and makes a statement about what a better place the world would be if their power was used for good and not evil. The relevance of this of course is that this is an analogy of what Powershop is trying to achieve in electricity.”

I don’t know who I feel more sorry for. The people who came up with this tripe, or the fools that bought it.

Thank you all for your feedback on our campaign. We sincerely apologise for any offence or distress we have caused you. It was never our intention to upset anybody and by no means do we disregard the feelings, or diminish the pain and suffering of the victims of these dictators.

Based on feedback we have received we have decided to remove the images of Saddam and Kim from our campaign (existing posters will remain in place for another week or so).

In coming to this decision I remain comfortable with our original decision to proceed with the campaign. However, I can only do this in the knowledge that our motives and objectives are genuine ones. Equally I am comfortable that the decision to remove the images of Saddam and Kim from the campaign now is the right one.

Obviously the objective of any comercial advertising is to attract attention and increase sales; our campaign is no different. Having chosen the creative direction we did (using the images of dictators) we were also happy that our campaign would draw attention to contemporary human rights issues; we do not believe it is wrong to do this per se. However what feedback has highlighted to us is the connection of “commercial gain” with “human rights” is viewed by many with suspicion and synicism.

I can honestly say that while we wanted to draw attention with our campaign we intended to do that through debate and talkability. It was not designed as a synical marketing stunt to get wider media coverage. It is for this reason we are removing the images now, before our campaign becomes much more visible next week.

Over the past two and a half years we have built Powershop as the people’s power company and we pride ourselves on listening and responding to feedback from customers and the public. We are real people and not a faceless corporation.

We are not afraid to challenge traditional norms, and we can sometimes be a bit “out there”. We pushed the boat out with this campaign with good and genuine intent. But we got it wrong and we are now working to make it right.

As a long-time customer, I would like to say I’m fine with this campaign. There’s a previous poster with Che on it, and I’m fine with that too. I say that even though I have lived under the rule of a non-democratic system.

interesting explination
my issue is that these ads do seriously upset and offend people. from a simple marketing point of view this is foolish. you will never get customers when you have offended them. Having the Nth Korean dictator there has completly alienated the entire NZ Korean community. you have lost any chance of gaining them as customers, or their friends, or people who may sympathise with them.
Accept the ads were a poor decision, apologise (genuinely) and do somthing that will provide a positive customer experience.
Note – the more you tell me these ads are funny, the less likely you are every going to make me smile…

I am appalled. At the same time when Powershop ignoring my repeated complaints asking for explanation on enormously high readings in one-and-half-man household with almost perfect insulation and one of the most efficient contemporary heating device (micathermic panel) they fronting up their marketing campaign with notorious dictators know by their ignorance of the genuine suffer of their “subjects”…I just discovered that even on the days when no one was at (two bedroom) home and all electric appliances were switched OFF, average daily readings are still showing between 45 and 50 units…

@Anthony: Our apologies to anyone we have offending are genuine. And while our campaign was well intended we accept that it is being viewed in a different light, that is why he have responded to feedback and changed tack with our campaign.

From the PowerShop “Opps!” Dept.:
I was watching the History Channel on Sky tonight, and was interested indeed to see the solid links between Saddam Hussein’s Ba’ath Party and Hitler’s Nazi Party!
So PowerShop may not have actually used Hitler in their ads, but they may as well have!!!!

This is not in poor taste, this is much more than that. Putting their pictures up is supporting these tyrants, and honestly even though your company has apologised, Im still seeing the pictures on the internet and on bus stands.

“Same power different attitude”

Imagine if a Gas company was to put up pictures of Hitler with the slogan “Same gas different attitude”

@John: My understanding is that the posters have been removed in Auckland and will be removed in Wellington in the next couple of days. The online ads were supposed to be removed last week, but due to a miscommunication only the Saddam image was removed initially. I believe the Kim image has now also been removed.

I think they are funny and fresh. I certainly don’t feel as Power Shop has given these horrid people any extra power, but rather opened up discussion and put these often forgotten human right issues into current dialogue.

c’mon guys, lighten up… NZ is too uptight, if this campaign got your attention and made you see how much you can save then it worked. advertising is all about raising eyebrows. I agree with @Alcia…They are funny and fresh.

Lighten up, friends! I agree with Louis and Alicia, and please don’t remove your campaign from your website, or even from bus shelters! Many NZ consumers do see the big power companies as abusing their power. Powershop, though a subsidiary of one of the big five, has chosen a unique business model, and used competition instead of regulation to challenge the oligopoly. Come on guys (almost all the campaign-haters are guys), have a laugh once in a while! Ari, fight the boring PC bureaucrats, keep the campaign going.

Well, all I see here is a really great attempt at basic marketing skills. The fact that it has so many people, (seemingly) in an uproar is great advertising! As henry Ford said, “Any publicity, good or bad, is good publicity!” (*L*)

I love this campaign!!! Powershop you are brilliant…keep envisioning the new world where rulers might be as good tomorrow as they are evil and corrupt today! Thank you for the power inspiration boost…and please don’t remove your ads!!!! Keep them going! I love the Rupert Murdoch one!

Brilliant campaign!!! It is good to see really ‘out there’ NZ companies like PS who understand the Internet! Good on ya guys and keep it coming – creative, fresh, interesting, and on the cutting edge is what this campaign says to me. I get it.

My previous comment, “lighten up” applies to more than your campaign. I’ve discovered also that your specials make me laugh – none better than “Madge’s Monthly”!. How many people go shopping anywhere just for a laugh?!, Well I’ve got in the habit of reading my meter every single day, not just to keep a useful record for my personal use, but to check out whether there is a special on, each day. So I found “Howzat!” yesterday, a most generous special that filled my buy-ahead calendar right through the first week in January. Well done, Powershop team, you’ve given us a real incentive to read our meters! And have a great Christmas break, you’ve earned it!

@Aaron: We replaced the previous monthly cost report with the “Account Reviews” report which gives you a breakdown of your costs at each account review (approximately monthly). We did this to align with your monthly statement emails and so that the charts are based on actual meter readings and usage, rather than an estimated monthly allocation.

@Zenith: With hindsight, perhaps. But we did want to make a strong statement with our campaign and using real people helped that. Having said that, we have used both less controversial and also fictional characters in more recent evolutions of the campaign.

I personally think the “Thatcher” poster alone would have proved an enormous success. Very funny and intelligent advertising. First time I can remember clicking on an ad because I liked it.
Had I seen the posters featuring criminal dictators, I probably would have been less impressed.

@Professor Kranz: Fair comment. In hindsight we’d perhaps have taken a different approach, but we have learnt and we’re now back on track with a campaign that, as you say, is attention grabbing – for good reasons.

According to the email on March 7th, “we’ll need to increase your annual electricity cost by approximately 8.1%”.

So I was surprised to login this morning to find that the price of the standard $49.95 value pack had risen by 37.5%. And it can’t just be a seasonal thing, because even the summer prices are 26.2% above what I was paying for value packs in March.

I do appreciate that warning of the price rises were given (and I took advantage of that warning!), but there still seems to be a great disparity between the degree of price rise that was signalled, and the degree of price rise that shows in the store.

@Andrew: The 8.1% you were quoted is correct, but there are a few things going on here. Unfortunately, the 1 April price increase coincides with a seasonal adjustment that makes the increase look much bigger. Also, the introduction of Simple Saver means that you will be able to buy approximately 25% of your usage at significantly cheaper prices. You can get a more realistic feel for the overall impact by looking at the price of your Spring power pack – you should see this is much closer to prices prior to the increase after you allow for the benefit of Simple Saver discounts.

Just want to say that I think your simple saver is a brilliant product.
But seriously, you missed your chance here.
You should have presented customers today with an “April Fool’s Day special”
– perhaps 500 units @ $0.01 cents / unit that don’t expire ever ??
– followed by a redirection to some appropriate link for anyone that tried to buy it.

It’s the sort of promotion I would have enjoyed seeing from Powershop. (now don’t try and say you didn’t think about it …)

@Ari – you guys are fantastic! Someone contacted me and found that you’ve had me on a wrong network tarrif for two years, which is why my prices rose so much (incorrectly)! Now that the tarrif it’s fixed, the increase is nowhere near what it looked like when I logged in this morning! Top marks!

@Aaron: we have done just that. We have changed the merit order for Simple Saver so that it will be used ahead of other powerpacks; the last thing we want to do is disadvantage or discourage customers from planning their power purchases.

That is pretty good and quick response to a customer suggestion.
I’ve previously worked as a pricing manager in an electricity and gas distribution business and changing tariffs usually occurred on a more glacial time frame

Good on you Powershop, (Personal opinion)
Intresting debate, but dont waste time. Time is money.
No one wants to hear Ari apologise 24/7 at the end of the day he said sorry. Get over it
. Stop giving Powershop bad publicity with your comments. Not worth your time if your not getting paid.
General
B’Comm/ Honors Graduate

Hi Ari, Quick qustion in regards to prices. You say you buy power 12 months in advance? Ive been using your comparisson Calculator and In a majority of areas Powershop cannot save, Unless with this simple saver?
Its a great tool but I mean who wants to click three times for the discount before it was “You dont have to do nothing”. A portion of powershop customers hardly check their bills so why put in a simple saver? 3 clicks=36 clicks a year. Why did bring simple saver into the picture?To keep prices down?Couldnt you do that by set and forget?…Please explain. Very confused.

@General: the main reason for doing this is that we want to encourage people to reduce their power cost by also using less; this is a more sustainable way to save in the long run, particularly in the face of continually increasing costs/prices. What we also know is that customers who login regularly and buy power become more conscious of their power use and tend to use less as a result. The Simple Saver structure is designed to reward regular shopping through lower prices, with the added benefit of conscious consumption. We have really focused on making accessing the special as simple as possible – actually 2-clicks from your weekly emails; more effort than doing nothing sor sure, but we believe there are benefits. We will also continue developing the product to ensure more value and less effort (if possible).

Some people do need to grow a sense of humour, but more importantly get vindicative and agitated by things that matter more than an ad campaign. Ongoing human rights violations by all superpowers and their allies is one. The selling of NZ’s few assets offshore (energy asset sale, crafar farm, the still secret TPPA) is another. Cryonism in NZ politics still another. Lack of action in the face of appaling alcohol, gambling, child abuse, statics too. Or the billions wasted in building crappy roads and buildings that keep requiring high levels of maintenance.

So pick a cause, and get wound up and more importantly *do something* about things that matter, people. Whining about an ad campaign does not count.

Who next on the posters btw? Ghaddafi? Kissinger? Mao? Reagan? Mugabe? Noriega? Pinochet? Bush? Putin? Bin Ladin? Congo’s Kony is in fashion atm. The list is long unfortunately.

Theres nothing special on behalf of powershop besides comming over to use $50 credit and head back to their current provider. Is the marketing team focusing on anything new to offer value to a customer?

I mean Simple saver is a great idea, But have you trialed/error this product before marketing to the public?

Sorry Ari, You might have the best customer services but not the best prices. According to your calculator. Could you please talk to your board of directors and make sure their not being greedy with profits?

Powershop Qoute’ When your with powershop, we put you on a fluctuating rate that matches the way we buy power wholesale?.

so like us and your current retailer buy power about 12 months in advance. the price we pay doesnt just go up but also goes down. AT THE MOMENT YOUR PRICE IS SET AT THE MOST EXPENSIVE POINT ALL YEAR ROUND?

Where did you get this information from? what makes them different from Powershop? according to your calculator it shows no difference?.

you might not have daily charge but its all incorporated in the rate and also the MARGINS. so be ohnest how much is the rate and how much is the margin?

Encouraging the public is great, But like i said before a majority dont check bills and would hardly never especially if they have Direct debit. If a customer really wanted to know info about power they would ask. But customers want to know SAVINGS, SAVINGS, SAVINGS.
not how much they used, or what to do to minimise power. Customer will ask when their bill hits the roof ‘ how to save’ I think you know very well what scheme is in place. If customers Forget to click simple saver there better of to be with another retailer.

Example: Genesis Energy-$300 Bill

Customer does nothing to get a 10% prompt payment discount but to pay on time like a powershop scheme.

Powershop- Direct Debit/\and also have to check bills every month and click Simple saver???

Ive come to conclusion, Ari your company is like everyone else. To make profit witch is the truth. I mean it was a great idea three years ago and good product, these days Meridian Energy have just used this as a marketing tool to get people to pay their bills ontime. Because they cant move their customers over why not just make a seperate entity POWERSHOP.Serious concern. Power prices eventually go up, but how can it go higher then retailers you say charge winter prices all year round?. Its either someones not doing their job properly at the market buying or DIRECTORS being to greedy wanting a piece of the pie. These are the concerns that need to be adressed asap. Not focussing on this simple saver. GET THE COMPARITOR RIGHT. Id hate for your company to come on fair go for the wrong reasons this time?

A few comments. Our prices are currently at our winter peak levels and will drop again in spring/summer. If you roll your cursor over the chart below the savings calculator results you will see the different monthly prices. We are honest about our rates, indeed if other retailers are cheaper than us our savings calculator results will make this clear. The reason prices have come up this year is that we are facing increased lines charges (needed to fund Transpower’s national grid upgrade projects) and a significant increase in wholesale energy costs, particularly in the South Island. Our margins per unit of electricity will actually reduce next year as a result of the increased costs we face. The introduction of Simple Saver is at a further reduced margin. Margins vary a lot across different areas and different customers, but on average our expected net margins for next year are around 3.5% – I think even you would agree this isn’t excessive.

We are aware that some retailers have discount offers in some areas at the moment. Unfortunately we cannot match these offers, and believe these are are not sustainable in the medium term. However, overall we are confident we give our customers good value for money and good service. We genuinely care about our customers and do what we can to help you reduce your power usage and cost.

I assure you, your suspicions are misguided. It is unfortunate that we have needed to increase our prices this year; Simple Saver is our genuine attempt to help reduce the impact on customers. We know from many customers that logging in regularly increases their awareness of how much power they are using, and they tend to use less as a result. We want to encourage and reward this behaviour. We offer a reduced margin product that gives price savings, but we are also trying to increase awareness of usage to help people save money by saving power.

We also have concerns about so called “Prompt payment discounts” – our view is that these are late payment penalties in disguise. Take Contact’s 22% for example; if you were late on a single payment (say, because you had a child’s dentist bill to pay, or an unexpected mechanics bill) this would be the equivalent of a 2-3% increase in annual power costs (possibly more if it was winter bill you paid late).

We have worked really hard to make Simple Saver easy to access, and genuinely believe it will help customers reduce their power usage and costs; resulting in them being better off with Powershop, even if we aren’t the absolute cheapest price. I am disappointed that you see things differently, but I can assure our intentions are genuine.

Ok, Margins are great, but thats for next year what about this year?
I never asked what the price is for lines charges but for MARGINS this year?

So what your saying Ari is that customers should be with Powershop for summer/spring and head back to their retailers for winter/autumn when it counts?Because to me thats giving cutomers value. Not some but every other retailer is offering a prompt payment discount to their customers.Your right I have scrolled the cursor for alot of retailers/different plans/areas and the ohnest truth is that you cant save any money over the course of the year. Please tell me what is the margin in Auckland-Blockhouse bay Vector network.?

Your confident? I dont want confidence I want assurance for savings only. Service is great dont get me wrong , your onto a winner their but savings?.. Simple saver cuts into margins?
the concept of the company is misleading in regards to the adds saying retailers charge winter prices all year round. You cannot say that unless you have facts. If it was true then all prices of retailers would be higher then powershops prices. All im saying Ari is that you should go back to the drawing board with meridian and get the simple things right. not with simple saver its not the answer to this years price increase at all but sounds as if its the answer to the public not paying bills for the directors pocket to fill. ‘ because your taking all the cream’ and theres alot of it.

Dont be dissapointed, its only for the companies best intrest. To get the basics right. I want powershop to be the best, as a potential customer I need to know that Powershops intentions are genuinely for the customer not the margin.

Makes sense Ari with that example but if everyone had direct debit payments just like powershop? where does that leave you?

I know your marketing to a specific group of people email savy, pay bills on time to reduce debt. But thats not enough. Cater for everyones needs besides the middle class upwards. Im sure you have ideas that would improve the company.

Work harder on more products rather then just simple saver. simple saver is just the tip of the ice berg. we are heading into winter where your prices are at its most expensive. Simple saver wont save you in the winter but find a more creative way of reducing prices by doing nothing?

There are reasons out there why their are inventions to make life easier because thats the way humanbeings are. the simple the better. Give info when needed not force info, Rebelling is second nature.

These are not suspicions and they are not misguided. this is constructive feedback that should be adressed and making sure your doing the right thing by the customers best intrest.
Dont get me wrong everyone needs to get paid, but does it mean at the cost of the consumers price?. Their are more ways to make bills cheap but still sustain a small margin. I would like to discuss this further in person, if that is possible.

@General: You have raised many points, and I do appreciate the feedback. There a few things I need to correct you on, however.

Firstly, Powershop is owned by Meridian, but completely operationally independent. They have no involvement in either our product development or pricing.

Secondly, our Directors are not remunerated based on our margins or profit and Meridian is our sole shareholder.

I can assure you we do put the customer first in all that we do, that is why we rank the highest in customer satisfaction, why we developed Simple Saver rather than blindly passing cost increases on, and why I am personally responding to your feedback. That said, we are a business and our shareholder is entitled to a return on the investment they have made in Powershop. We feel we have struck a good balance, we offer good value for money to our customers and earn a modest profit.

We are and have always been focused on reaching a win-win position with our customers; we are at the low price end of the market (we accept not the absolute cheapest in all areas) and we work hard to deliver products and services that help our customers save power and money. In return we hope that we are building loyalty and that our customers choose to stay with us. We would rather make a modest profit from a customer over a long period of time, than make a quick buck by hiking prices – this is what I mean by a win-win.

One thing I definitely agree with is that Simple Saver is the tip of the iceberg. We will endeavour to continue to evolve products and services to meet individual customer’s needs. We do however need to avoid the temptation to try and be “all things to all people” – in my opinion these leads to not meeting the needs of anyone. We are not targeting middle class upwards by any stretch, what we are targeting is customers who want to develop a better understanding of their power usage and cost – this applies as much (arguably more so) to customers on fixed incomes (of which we have many) as it does to customers on higher incomes.

I am happy to discuss your feedback in person – feel free to email me at ari.sargent@powershop.co.nz and I can meet you on a future trip to Auckland.

@General – I’ve read all your rantings and just want to say that for me it’s results that matter. I switched to PS a year ago when Mercury invited me to sign up for a 3 year fixed rate contract. I did the math then, and have compared the results now to the same conclusion – I’m way better off with PS.
I’ve just been back to the Mercury site to get the current rate and re-check my figures. My viewpoint is unchanged.
My monthly usage is 350 units. The uncluttered simple GST-included rate that PS uses makes it easy. With Mercury, by the time you add on the fixed line charge and GST then take off the prompt payment, I’m still ahead at powershop – and that’s at the default current winter rate! I’ll be even way more ahead later on in the year when we come off the peek pricing. I log in daily so there’s the regular specials as well.
I know I’m on a winner here.

@ Paul B, Maybe, but are you saying results in winter for powershop you were better off with rather then mercury?

The idea of powershop is great dont get me wrong a year ago but what about todays rates and so forth.

My theory goes to say is that powershop is competitive in summer but winter best to move back to current providers. ???

With mercury it breaks all the charges down so you know what your paying for, Powershop? you just dont know because its ALL ‘incorporated into the rate’ so how would you know price is cheap when really you basically dont know whats being charge P/kwh,D/c,Ec Levies???

Im not speaking on beahlf on any retailer im just saying,Regular specials these are great marketing tools such as simple saver but do you actually know what the margin your paying to a director this year?… or any other reailer out there?. These days its all about the public over paying and I have a few ideas that I belive might help Ari/Powershop become the best retailer in NZ.

We have intentionally simplified our pricing – you know exactly what you are paying in c/kWh and can clearly see the value in specials and other products. We don’t believe in bamboozling customers with this rate for that, and that rate for the other. When you buy a litre of petrol, you don’t know how much the crude cost, how much it cost to refine, how it cost to transport to the service station and what margin the service station. All you really want to know is how much it costs in c/litre and how much you are putting in the tank. Imagine what a nightmare it would be if a service station had a whole bunch of fees associated with filling up and all service stations had different fees!

You are correct that our prices rise in winter, and in some cases these will be higher than other retailers at that time of year. However, it is during winter when you are using more that you have the most to gain by monitoring your usage more closely. Our aim is to deliver value over the total year, and acknowledge there will be some unders and overs. From a price perspective you may be better off switching to us for spring/summer and elsewhere for winter, but most customers understand that we give value for money overall and are happy to wear the unders and overs.

At the end of the day around 90% of the cost of a unit of power is outside our control (wholesale energy, transmission & distribution, and metering). Within that cost structure we doing what we can to keep our costs low, by operating a low-cost online platform and offering lower margins to loyal customers through specials. That said, I’d love to hear your ideas on how we can improve what we do – we’d like to think we’re already the best retailer in NZ

I mean how can powershop be different if trustpower is offering a familiar service low rates in summer smack high winter rates, the only difference is that powershop is online, these days everybody is online. Genesis energy online nothing new. The way I see powershop is that they had a great idea but great ideas are great ideas not problem solvers for the future. It needs more concepts instead of just focussing on the one product. Having a variety of products not specials. specials are short term but more long term products for powershop would seperate and identify powershop as powershop not another retailer.

Ari where not talking about petrol here, its the moral of the story that counts. Its the fact that you show a price but never tell customers how much is for the daily charge. everybody wants simpllicity its human nature. 90% ok now were getting to figures. so the other 10% is margins? what happen to the 3.5% margin or is that next year?
So best to put a pump with powershop because less kwh used meaning daily charge would not affect?. But if that happens I see here customers will be getting a higher KWH to make up for the cost throughout the year by spreading cost into customer bills?hmm

@General:
My understanding of Trustpower’s friends and family programme (I could be wrong on this) is that you need to be with them for a while before you qualify and you may need to commit to a fixed term contract that has break fees if you ever want to change supplier. So there are some pros- and cons-.

I don’t agree that other retailers are online in the same way that we are – they send paper bills, and customers can’t serve themselves, they can only view their bills.

We are constantly exploring new products and services to offer. We have a long list of ideas, but we do need to prioritise these. Again, I’d welcome some specific product (short or long term) suggestions you may have.

@General: We do not have daily charges. You pay the published c/kWh price on each product.

The 10% that is “within our control” covers our own operating costs, such as contact centre, sales and marketing, corporate overheads (finance, legal etc). and IT related costs. Once all that is paid for we are left with around 3.5% net margin.

Delivering value over the total year is great. The best customer service, The fastest growing company.

What about the best price in New Zealand? I believe your company can be this. I liek that fact that you comment back from the top of the top wich is excellent. Gives customers a voice for wants and needs. If i was a consultant for Powershop how would you convince me to move over for the winter time?

@George: It is correct to say you don’t pay a daily charge. We have fixed costs (and pay lines companies fixed daily charges) which of course we try and recover, but these are not passed on to you in the form of fixed daily charges; as you say they are incorporated into the cost we need to recover from unit prices.

To be honest, I am not sure what your example is trying to demonstrate. What I have said is that next year we expect to earn a 3.5% net margin. What we earn beyond that will be a function of market competition, the energy costs we are able to secure and what benefits we can derive from increasing the size of our customer base. I expect in some years margins will be higher, and in others lower. But 3.5% is a benchmark that illustrates that we are not making excessive profits for the level of investment and risk in our business.

So does that mean your salary will increase when margins are higher, If buisness is falling will your salary fall according to the profit on a year to year basis? or does it keep going up, up and up?

So who will benefit from this aspect of the buisness? is it the directors, customers or both? And who will be disadvantaged? at the end of the day you have already said this is for the customers best intrest so does that mean the directors will take a slighter net margin???That is genuinely the right thing by the customer.

Of course there are costs that needs to be paid but would the directors/yourself take a cut of their pay packet for the intrest of their customers. Getting customers is easy but maintaining is the hardest aspect to keep up with. I have alot of ideas Ari it would be great if I could set up an appointment when you come up to auckland. grab a coffee etc etc

@General: Actually yes, in my case I’m still better off in winter with powershop than with Mercury. Maybe it’s my lower usage, but by the time you add in Mercury’s fixed line charges and the GST, yes it’s cheaper even after the prompt discount.

What I really like about PS is the one simple rate. No disrespect, but having read all your postings above, I think you just don’t get it. The PS way is about making it easier. Your ideas sound like a sales pitch and that you’re angling for a job interview. Well good luck with that. But let me tell you, when I go away for a month and leave the place locked up with the power off, I want to come back to a power bill that says $0.00.
I get this with PS.
With the others I get a fixed daily charge + GST.

@PaulB, Maybe it is your lower usage. I get the fact that its one rate thats trying to make it simple witch is a great idea. You are a customer that has wants and needs and if your happy then thats excellent. Personally Ive spoken to a few powershop customers, family and freinds etc etc. These are questions that I am asking on behalf of them and they are with powershop so ofcourse I will be concerned if they have dealts.

I am not looking for a position at all, I am no sales consultant nor do I intend to work for powershop. I am a Chartered Accountant on behalf of Jacobsen Associates. It’s general discussions and not everyday you get to discuss issues with power companies. I want to discuss ideas in general nothing major but maybe the ideas I have might or might not improve the company. They are ideas that Ari has agreed to take up, I mean and I’m thankful for the opportunity that he has taken time to write to customers wich is great but can be excellent??

I believe I have information for the benefit and success of the company. So if you have ideas paul why dont you try improve powershop to be the best retailer?? I mean your one customer out of 40,000. Ive spoken to 8 customers with major power accounts but also minor acounts aswell. I have a fair idea on how powershop is operating do you? Or you dont care unless you get $0 bills?

One more thing Paul B, I garuntee you anywhere in New Zealand that mercury is better in the winter then powershop. I have facts, according to powershops website and winter rates MERCURY ENERGY is better.

In one of Aris post theres no such thing as $0 bills. Next month powershop will include the daily charge cost into your bill over the course of the year to recover daily costs.

Maybe you should do some research before you scramble on about how great powershop is. You have no idea that your being PROPAGANDA into this idea of $0 cost bills. Ari why dont you explain to your customers before they switch that theres no such thing as a ‘FREE BILL’ because at the end of the day those costs will be spread over the course of the year without customers knowing or even reading terms and conditions. This is the reason why powershop is lacking, no sense of direction in a customers perspective. Does not even know besides seeing $0 Bill and thinking its GREAT. Goes to show that this simple saver product will not succeed because telling by PAULB’s comments he is walking into a brick wall next month. Cheers PaulB shows how smart you are thinking the best of a power company. Ari you didnt even comment and explain whats going to happen next month and the month after for this customer.

@All: please try and focus on the issues and “play the ball, not the man”.

@General: Like I have said before, we do not have daily charges. Everything you pay is in the c/kWh quoted at the time of purchase. You are correct, however, that we week to recover our fixed costs through those unit prices – this is described on our website – http://www.powershop.co.nz/faq.html#faq-30-105

What we attempt to do is recover our fixed costs across expected annual usage. We build up this expected usage profile by monitoring how much you use over a number of months. If you had little or no consumption over a month (because you were on holiday), under our current methodology this would not necessarily result in an adjustment to your expected annual usage and therefore price.

But in regards to my previouos post Ari? can you please answer this statement?>>>>

So does that mean your salary will increase when margins are higher, If buisness is falling will your salary fall according to the profit on a year to year basis? or does it keep going up, up and up?

So who will benefit from this aspect of the buisness? is it the directors, customers or both? And who will be disadvantaged? at the end of the day you have already said this is for the customers best intrest so does that mean the directors will take a slighter net margin???That is genuinely the right thing by the customer.

Of course there are costs that needs to be paid but would the directors/yourself take a cut of their pay packet for the intrest of their customers. Getting customers is easy but maintaining is the hardest aspect to keep up with. I have alot of ideas Ari it would be great if I could set up an appointment when you come up to auckland. grab a coffee etc etc

Sorry, yes ideally our Customer Service Reps would be aware of this, however, in this case it is more a case of “practice”, rather than “policy”.

In relation to your question about salaries; I am not sure what relevance this has to your original post, aiming to help us be the best retailer in NZ, but for the record:
– Our Directors are paid fixed annual fees they don’t relate to margins.
– A number of staff (including myself) have bonus payments based on meeting a number of targets (including profitability, margin, growth and retaining customers) – if our margins are “squeezed” do to increasing costs these bonus will be reduced (or not paid). Again, for the record, no Powershop staff have been paid any bonuses for the past 3 years and most staff remuneration increases have been well below the level of inflation and declined in real terms, despite increasing workloads. I can assure you there has not been any “up and up”.

@General: to be honest, I have entirely lost the gist of this thread and you have completely confused me now. I thought you were going to offer me some suggestions/solutions? We have been, and continue to be competitive in most areas. As I have stated, this doesn’t mean we will be the absolute lowest price, in all areas, at all times. We are focused on delivering information and tools that allow customers control their power usage and their energy cost so that we can still deliver value for money. We have a number of ideas on how we can continue to improve, but we don’t have an endless budget to spend on improvements, and it takes time to do things well. I apologise if we aren’t meeting your expectations, but we’re doing as much as we can, and to honest, way more than most.

its quite fuuny how some people cannot find the funny side in life, im sure some of you have beter things todo then have a good winge, i think there approach is wonderful and i hope to see more of this type of shock advertising, NZ needs more shock value, thank you powershop for making me giggle

people can not see the funny thingas in life at least they didnt use hitler for a gas campaigne, now that would have ruffled some feathers, ive worked in the power sector for a few years now and all of you who think that powershop is not that good, you need to look at your own retailers and really look into what they are doing, do they care about you, NO!!! they dont they just want you $$$ and a hefty salary at least POWERSHOP is being pro active in regards to power in nz, what have you done to help latley…….. probley nothing except having a good winge, to all that know whats up… good on you and for those who dont…. SHAME ON YOU, i love powershop and thank you for being here

@Macnrow – You, along with the other hippies here should smack yourself with a REALITY CHECK! This company ties prepay & an email together …in a pink color. SO WHAT! SAME POWER …DIFFERENT BRAND ?? Exactly, THERE IS NO DIFFERENCE WITH THE POWER. Which is the main concern. Silly.

Second you need to provide a comment where you know where to use some GRAMMAR! Like a FULL-STOP MARK.

Meridian is giving credits for homeowners who have solar panels and feed back into grid. Will Powershop do the same? Homeowners who do this do the country a favour by avoiding expensive network upgrades and building dams that ultimately distort the natural environment. Also roof top solar is cheaper per megawatt hour than windfarms. However, power companies seem to have it in their shortsighted minds that consumers must pay them for power regardless of the sense of what I have just covered. In 2008 it didnt rain and the country nearly ran out of power, this will happen again, so what ‘reserve’ generation have Powershop up their sleeve?

@nice, look just because people are energy conscious dosent mean we are hippies, pre pay power is pre pay power, were does it say with Powershop that we are a pre payed supplier. just be cause they let you buy in advance dosent mean that its pre pay. Pre payed power is that if you dont buy it you cant use it, so explain to us here since your an expert on it how powershop is a pre payed supplier, at the end of the day powershop is trying to make a change in how we consume power and our views on it, as i said before look at you retailer what are they doing for you …….. NOTHING, at least powershop is making a diffrence weather positive or negative they have got your attention havnt they

Im not sure if youve seen the news a couple weeks back but powershop came on television. being really expensive. What THE… Sorry Ari I dont believe in what the copmpany stands for or how your going about it buisness wise. I use to work as a powershop consultant but left. Thats how i know its full of rubbish. Listening to the CEO talk his way out of nonsense is crazy. I know more then what you think. I use to sell powershop until prices hike over and beyond retailers. FACT. There is nowhere in nz where you could make a saving even with simple saver. Simple saver is another way for powershop saying if you forget to push simple saver where going to charge you full price. what happend to not doing anything at ALL. Ari dont make me laugh. Powershop is just another scam and you know it. like everyone else.!!!

@ Craig. You will never know until you ask. ( I assume youve never asked questions before) ? @ Macnrow your not a hippie your a suckah for being a powershop groupie. Wich is sad , sounds like a sales consultant suckered you to become a hippie lol.

@ Ari you know very well what youve done to a majority of workers you have let go because not making sales. must be hard for yous now. going through a rough patch. quick solution. make it cheap and do nothing like before. if not make it cheaper then everybody else. Consistentcy my friend. I left your company because unfair treatment and definately not a place i want to be selling power for. !!!

@General: you are entitled to your opinion, but facts are facts. To my knowledge we are not “really expensive” in any area. I accept we may not be the absolute lowest price in all areas, but we remain a cheaper option than current supplier for most customers. Independent price comparison sites such as powerswitch.co.nz and switchme.co.nz allow consumers to make informed decisions about price and service.

I dispute that we are another scam; we are completely transparent about our services and pricing, we do not mislead anyone in any way. We are quite willing to accept that we are not for everyone and will not stand in the way of customers who want to leave us to go to a retailer that better suits their needs and circumstances. We’re a million miles away from being a scam.

Received an e-mail last friday that being a low user of power I will be charged a total of $80 dollars per year to make it up to a reasonable total,wether used or not. SUCKS,you try and save power and all you do is kick in the guts,makes you wonder!!!

@L B Hickin: We have had a lot of similar feedback from other customers. We wanted to be upfront about increasing power costs and as result probably haven’t communicated the change as well as we might have.

We have fought as hard as we could for as long as we could to keep our low user prices down, unfortunately with rising costs this is no longer sustainable and we need to recover a greater contribution to our fixed costs of supply.

What we have done though is introduce a formal low user tariff that continues to ensure our low customers can receive prices below our standard prices.

Even after the change we remain confident that our prices remain competitive with other retailers who typically have fixed daily charges to recover the same costs we are seeking to recover.

Ari, regardless of whether or not one’s account is affected or not, where on your webpages do customers find this information? Prospective new customers should have access to all relative information before making a choice to switch. I have in the past defended PS against General’s onslaught …. was he right all along??

@Paul: We have recently added an FAQ to our website and we are in the process of updating our cost estimator that will incorporate the new low user rates – this will be complete before the prices become effective on 1 October.

@L B Hickin: The $80 is not a surcharge, it is a contribution to the recovery of the fixed costs of supplying your property. Our low user prices recover 34.5c/day contribution to these fixed costs, whereas our standard prices fully recover our fixed costs – these vary by area but are closer to $1/day.

Please answer the question, can I use up to another $80 worth of power to make up the difference before I get charged for more power? also could you please give me the magic number were you get charged extra, regards.

@L B Hickin: I am not sure I fully understand your question, but I’ll have a go at answering what I think you want to know.

The short answer to your question is no. The more power you use the more it will cost you.

The longer answer is, I think your question may be based on the misunderstanding that when you become a low user you are suddenly hit with a surcharge (that would have been avoided if you remained a standard user). This is not the case. Low users actually receive a discount to standard rates, so you benefit as a low user, you are not penalised. The threshold for being defined a low user is specified in the electricity industry regulations as 8,000 kWh pa if you live north of Canterbury or 9,000 kWh pa if you live in Canterbury or further south.

As I tried to explain in my previous response; our standard prices incorporate the equivalent of about $1 per day fixed cost recovery. For low users, this recovery drops to 34.5 cents per day (ie. lower).

The difference between our current prices and our new prices is that we currently don’t recover any fixed costs from low users, whereas our new low user tariff will recover 34.5 cents per day as prescribed in the regulations.

The simplest way to describe the situation is that low users will still get a discount, but the discount is smaller than it used to be.

Thank”s for the detailed reply,just one more question how is this going to appear on my statement,I presume that will appear as a total of eg, 31 days @34.5 cents per day.Also will buying your specials of power make any difference to the overall total? still rekon that it is an extra surcharge.

@L B Hickin: There will be no change in the way you buy power, or how it appears on the statement. All that will happen is that your unit prices will go up slightly, and they will vary slightly throughout the year as your expected annual usage goes up and down (this already happens for standard users).

This is an increase in your power prices, but rest assured it is not a surcharge on low users.

@General: Sorry, you really have lost me. As you have never been employed directly by Powershop I can only assume that you are/were an employee of one of our sales partners. We expect all organisations that we work with to maintain the same standards around honesty and transparency as we do.

YOU ARE EXPENSIVE. Ive worked under powershop and i know truely well it is to expensive. Il rather pay for service charges then not know what my price per kwh is going to be next month and so on. atleast its fixed. your going to sit here tell someone whos worked for the same company something else? whatever the company is a scam. ive sold it. I know know the ins and outs. you fired the people when bbuisness wasnt going good this year . AUCKLAND OFFICE. just because the company didnt have good rates. what the. Joyce is the trainer am i right? or wrong?

No you dont ari. sales partner. haha what joke still sold under yous. the company i worked for was loosing money. so they couldnt afford to pay us because you were paying by the sale and if powershop had competitive rates it would have been easy to sell. because powershop werent competitive enough and still in the minus savings how can you sell a product thats not even sellable to the eye . its not even promising savings??? tell me tell me…

doesnt matter if it was a partner or not, still not a good look on powershop at all!!! To joyce. your not a good trainer i suggest they find someone else. you trained me but when buisness wasnt going well you werent there to help with questions at all. to much watching movies. lol you should be sacked.

@General: Once again, I am really struggling to understand your point. I have no intention of setting my legal team on you – you are entitled to your opinions. As I have said above though, the facts will stand for themselves; it is true that the market has become more competitive in the last 12 months, and undoubtedly there are some competitive offers in the market. We remain the cheapest provider in a number of areas, and we are near cheapest in others. It is not be possible to be absolutely cheapest in every area all of the time and stay in business. Our focus has always been on helping customers to change their habits and use less power, so that even if we aren’t absolutely the cheapest customers can still be better off with us. We have always encouraged customers to seek out the deal that is best for them. We want our customers to be with us because they choose to; that has always been our position.